Regulatory Update September 2020

By: TTA Regulatory Committee

The Public Utility Commission of Texas (Commission) will potentially discuss the TUSF rulemaking petition jointly filed by TTA and TSTCI during the August 27, 2020, open meeting. As you may recall, the associations have proposed a rulemaking to stabilize the rapid decline in TUSF revenues via long-term solutions including changing the assessment mechanism to a per-connection mechanism and including intrastate VoIP revenues.

On August 18, 2020, Commission Staff filed a memorandum discussing the background and proposed rule changes but did not include a recommendation. While it is extremely rare for the Commission to grant a petition for rulemaking, we remain hopeful that the Commission will open a new rulemaking to address the long-term stability of the TUSF funding mechanism by either including intrastate VoIP revenues or moving to a per-connection funding mechanism similar to what other states have done who have also been facing a declining state USF funding shortfall.

With respect to potentially addressing the declining fund balance, the Commission has decided not to discuss the TUSF rate review proceeding at the August 27, 2020, open meeting. Unfortunately, without a short-term fix, the Commission has indicated that the fund will not be able to meet demand in December of this year. The following pie chart represents TUSF disbursements by program for the prior four quarters.

Regulatory Update Pie Chart

TTA continues to work with stakeholders to try and find both short-term and long-term solutions to address the declining TUSF balance. While the Commission has suggested that the Texas Legislature should address broad policy issues related to TUSF during the next session, with the fund set to run out of money before the Legislature meets, not increasing the current assessment rate even in the short term means that the Legislature will not be given the opportunity to address the funding shortfall before reductions in support must be implemented.

If you have any comments or questions, please contact TTA.